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In 2008 the New York Federal Reserve Bank -- then chaired by current Treasury Secretary Timothy Geithner -- urged American International Group (AIG) not to disclose to the public its Credit Default Swaps (CDS) settlement payments to global banks. AIG ultimately received $182.3 billion in bailout funds and credits from the government. The Bloomberg News report about this incident is based on emails between AIG and the New York Fed obtained by Darrell Issa (R-Calif.), a ranking member of the House Oversight and Government Reform Committee.The New York Fed played an important role in AIG's bailout, providing it with an $85 billion credit line in September 2008. The bailout was expanded three times, and included a $60 billion Fed credit line, an investment of as much as $69.8 billion from the Treasury and up to $52.5 billion for so-called Maiden Lane facilities, a Fed program to buy mortgage-linked assets owned or backed by AIG.

The emails reveal that the New York Fed decided to pay $62.1 billion in CDS settlement payments to Goldman Sachs Group (GS) and "more than a dozen banks" but it wanted AIG not to disclose these payments to the public. Issa subpoenaed the emails after the New York Fed had urged AIG not to negotiate a discount on the CDS settlement payments to these banks -- which Bloomberg refers to as a "back door bailout" of the banks.

AIG then found itself in a tug of war between the New York Fed and the Securities and Exchange Commission (SEC). The emails reveal that New York Fed lawyers were urging AIG not to disclose the names of the CDS payment recipients and to withhold disclosure of its $9.8 billion in so-called synthetic collateralized debt obligations, which bundled derivative contracts rather than actual loans.

But the SEC argued that such disclosure was required, ultimately prevailing in AIG's March 15, 2009 disclosure of $27 billion in payments at 100 cents on the dollar. But the New York Fed also got part of what it wanted, since the disclosure did not identify the securities tied to the swaps or list the value of individual purchases by each bank.

My blood has been boiling while summarizing these facts. I feel a strong sense of outrage about them. Ultimately, free markets mean that companies succeed or fail based on the investments they make. But when failure was a real possibility, our government decided that free markets should be shut down and replaced with something decidedly un-free.

The two parts of un-free that bother me most? First, taxpayers financed a massive bailout of the bad bets of a handful of very wealthy bankers and insurance executives. And second, the government wanted the bailout recipients to keep quiet about it.